Grieg Seafood (Buy, TP: NOK140.00) - Choppy waters abroad
Grieg Seafood fell short of our forecast and consensus on headline EBIT, mostly due to weak results in the UK and high headquarters costs. We believe Covid-19 will continue to weigh on US prices and – despite the guidance for lower costs – we have cut our 2021–2022 EBIT estimates for Canada and the UK, leading to 8.2–6.3% lower EPS forecasts. We have cut our target price to NOK140 (145), but reiterate our BUY as a normalisation of markets and operations would leave the stock attractively valued in our view.Greig Seafood is a fish farming group, based in Norway, that specialized in salmon and trout. Co. is the parent company of the Greig Seafood Group. Co. is engaged in the production and sale of seafood, and naturally related activities to the sale of seafood. Co. is predominately engaged in the production of farmed salmon and trout, with a production capacity of around 95,00 tons gutted weight annually. Co. has 100 licences for salmon production and five licences for smolt production. Co. has operations in Finnmark and Rogaland in Norway, British Columbia in Canada, and Shetland (the U.K.).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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